A company's legal life begins on the day its articles of association are signed, but its real test comes years later: when one of the shareholders wants to leave, when votes are split at the general meeting, when a manager causes the company loss or when a contract with an important customer comes to an end. What can be done at those moments is often determined by choices made at the very beginning. A clause in the articles of association, the way shares were transferred or a termination clause in a contract can change the outcome of a dispute years later.
The main sources in this area are Turkish Commercial Code No. 6102 (TTK) and the Trade Registry Regulation. For commercial contracts, Turkish Code of Obligations No. 6098 applies, and where a debtor company is in financial difficulty, Enforcement and Bankruptcy Law No. 2004 (İİK) comes into play.
Choosing the company type and incorporation
TTK Art. 124 lists commercial companies as general partnerships, limited partnerships, joint stock companies, limited liability companies and cooperatives. In practice, the choice is largely between a joint stock company (anonim şirket, AŞ) and a limited liability company (limited şirket). The difference between the two is not only the amount of capital. In a joint stock company, share transfers are as a rule freer, and it is easier to bring in investors, go public or create different classes of shares. In a limited liability company, share transfers are subject to strict form, and shareholders may be held liable, in proportion to their shares, for certain unpaid public debts of the company.
Incorporation is carried out through the Central Registry Recording System (MERSİS): the articles of association are entered into the system, the founders' signatures are taken at the trade registry directorate or before a notary, and the company acquires legal personality on registration. Under Presidential Decision No. 7887, since 1 January 2024 the minimum capital has been TRY 250,000 for joint stock companies and TRY 50,000 for limited liability companies, and the initial capital for non-public joint stock companies in the registered capital system is TRY 500,000.
For companies incorporated earlier with capital below these amounts, provisional Article 15 added to the TTK by Law No. 7511 initially provided a compliance period until 31 December 2026. The Ministry of Trade extended this period to 31 December 2027 by a Communiqué published in Official Gazette No. 33403 of 17 October 2026. Companies that do not increase their capital within the period are to be deemed dissolved; since the Ministry has the power to extend the period again, the current position should be followed in the Ministry's announcements.
Share transfers
Share transfers are among the transactions in which mistakes are most often made in company law, because a transfer made without complying with the required form may have no effect against the company even if money has changed hands between the parties.
In a joint stock company
Registered shares are transferred by endorsement and transfer of possession; for the transferee to be treated as a shareholder vis-à-vis the company, entry in the share register is required (TTK Art. 490 et seq.). If the articles of association contain restrictions making transfer subject to board approval, the approval procedure under TTK Art. 492 et seq. must also be followed. In companies that have not issued share certificates, the transfer is made by a written assignment agreement under the rules on assignment of receivables.
In a limited liability company
Under TTK Art. 595, the transfer of a capital share and the transaction creating the obligation to transfer must be made in writing and the parties' signatures must be notarised. Unless the articles of association provide otherwise, the transfer becomes valid with the approval of the shareholders' general meeting and is registered with the trade registry. If any of these steps is skipped, the transferee cannot exercise shareholder rights, and the transferor often cannot free itself from the obligations arising from membership.
General meetings and management bodies
The ordinary general meeting is held within three months of the end of each financial year (TTK Art. 409). Approval of the financial statements, release of the board of directors, distribution of profit and election of officers are decided at this meeting. Failure to comply with the rules on notice, agenda and quorums calls the validity of the resolutions into question.
An action for annulment may be filed against general meeting resolutions that breach the law, the articles of association or the principle of good faith within three months of the date of the resolution (TTK Arts. 445–446). Resolutions that remove shareholders' inalienable rights or undermine the company's basic structure are null and void, and a declaration of nullity is not subject to this time limit (TTK Art. 447). Which defect leads to annulment and which to nullity is the first question that determines the fate of the action.
Board members and managers of limited liability companies are liable to the company, the shareholders and the company's creditors for damage they cause by culpably breaching their obligations under the law and the articles of association (TTK Art. 553; for limited liability companies by reference in Art. 644). This liability makes it important for corporate decisions to be taken with written reasons and for compliance with the duty of care to be documented.
Capital loss and over-indebtedness
If, according to the latest annual balance sheet, half of the total of the capital and statutory reserves has been lost, the board of directors must immediately call a general meeting and present remedial measures. Where the loss reaches two thirds, the general meeting must take decisions such as reducing or replenishing the capital; where over-indebtedness is suspected, an interim balance sheet is drawn up and, where necessary, the court is notified (TTK Art. 376). Neglecting these obligations may give rise to personal liability for managers.
Shareholder disputes and shareholders' agreements
The hardest disputes in companies are often personal rather than commercial: a say in management, access to information, failure to distribute profit, or one shareholder going into a competing business. The articles of association can regulate only some of these matters, so it is common for shareholders to enter into a separate shareholders' agreement. Such agreements cover voting agreements, pre-emption rights, tag-along and drag-along provisions, the procedure to follow in the event of deadlock, and non-compete obligations.
A shareholders' agreement binds the parties, but provisions not reflected in the articles of association cannot always be asserted against the company and third parties. The two documents should therefore be prepared so that they are consistent with each other. When a dispute arises, remedies such as the right to information and inspection, a request for a special audit, actions against general meeting resolutions, liability actions and, in a limited liability company, withdrawal for just cause (TTK Art. 638) are assessed.
Commercial contracts
A company's day-to-day business runs on supply, distribution, dealership, agency, franchise, service and confidentiality agreements. Most disputes under these contracts arise from term, termination, exclusivity and post-contractual obligations.
Agency is regulated separately in TTK Arts. 102–123. If, after the contract ends, the principal continues to derive substantial benefit from customers brought in by the agent, the agent may claim an appropriate indemnity (TTK Art. 122). Whether this provision can be applied by analogy to distribution relationships, which are not specifically regulated in the Code, is assessed according to how closely the relationship resembles agency; it is useful to take this possibility into account when drafting the contract.
Between merchants, notices of default, termination or withdrawal from a contract must be given through a notary, by registered letter, by telegram or by registered electronic mail (KEP) with a secure electronic signature (TTK Art. 18(3)). A notice that does not comply with the required form creates proof problems and may weaken a claim of justified termination.
Commercial cases and time limits
For commercial receivables and damages claims concerning payment of a sum of money, applying to a mediator before filing an action is a mandatory pre-condition (TTK Art. 5/A). Mediation is, as a rule, completed within six weeks; where necessary the period may be extended by up to two weeks. If no agreement is reached, an action is filed on the basis of the final report. Details of the mediation and litigation process are on the Dispute Resolution page.
Other time limits to bear in mind include three months for annulment of general meeting resolutions, the limitation periods in TTK Art. 560 for liability actions, and the general and specific limitation periods in the Turkish Code of Obligations for commercial receivables. If these periods are missed, even a justified claim may be dismissed without examination of the merits.
Financial difficulty and concordat
A company that cannot pay its debts as they fall due, or is at risk of being unable to do so, may apply for a concordat (konkordato) under İİK Art. 285 et seq. The application includes a preliminary plan and a report prepared by an independent audit firm; the court first grants a temporary and then a definitive moratorium, and the process runs under the supervision of a concordat commissioner. A concordat produces results when it is approached with a realistic restructuring plan, not as a means of buying time against creditors.
Our work in this area
We advise on company formation, drafting articles of association and shareholders' agreements, share transfers, capital increases, preparing general meeting and board resolutions and following up registry procedures. We review commercial contracts during negotiation and conduct mediation and litigation in shareholder and commercial disputes.
If an acquisition or merger is on the agenda, see Mergers and Acquisitions; for public offerings and capital markets transactions, Capital Markets. For foreign managers who will work in companies with foreign shareholders, the Work Permits for Foreign Nationals page, and for issues specific to manufacturing companies, the Industry and Manufacturing page may also be of interest.
Main topics
- Company formation, articles of association and choice of company type (TTK Art. 124)
- Share transfers in joint stock and limited liability companies (TTK Art. 490 et seq., Art. 595)
- General meetings, annulment and nullity actions (TTK Arts. 409, 445–447)
- Liability of board members and managers (TTK Art. 553)
- Capital increases, minimum capital compliance and capital loss (TTK Art. 376)
- Shareholders' agreements and disputes between shareholders
- Agency, distribution and other commercial contracts (TTK Arts. 102–123)
- Concordat and restructuring procedures (İİK Art. 285 et seq.)
Frequently asked questions
Is notarisation required for a share transfer in a limited liability company?
Yes. Under TTK Art. 595, the transfer agreement must be made in writing and the parties' signatures must be notarised. Unless the articles of association provide otherwise, general meeting approval is also required and the transfer is registered with the trade registry. If any of these conditions is missing, the transfer has no effect against the company.
Our company's capital is below the new minimum amount. What should we do?
Under provisional Article 15 of the TTK and the Ministry of Trade's extension Communiqué of 17 October 2026, existing companies must increase their capital by 31 December 2027 to TRY 250,000 for joint stock companies (initial capital of TRY 500,000 for non-public joint stock companies in the registered capital system) and TRY 50,000 for limited liability companies. As a capital increase requires a general meeting resolution and registration, it is advisable to start the process well before the deadline. Whether the Ministry has extended the period again should be checked separately.
Within what period can an action be filed against a general meeting resolution?
An annulment action must be filed within three months of the date of the resolution (TTK Art. 445). For void resolutions, a declaration of nullity is not subject to this time limit (TTK Art. 447). Who may file the action is set out in TTK Art. 446; voting against the resolution at the meeting and having this recorded in the minutes is important in this respect.
Can we file an action directly for a commercial receivable?
For commercial receivables and damages claims concerning payment of a sum of money, applying to a mediator first is a mandatory pre-condition (TTK Art. 5/A). If no agreement is reached in mediation, an action may be filed on the basis of the final report. For receivables based on negotiable instruments, enforcement proceedings may also be considered.
Can an agent claim compensation when the agency contract ends?
If, after the contract ends, the principal continues to derive substantial benefit from customers found by the agent, the agent may claim an indemnity under TTK Art. 122. The claim must be raised within one year of the end of the contract. This right does not arise where the contract was terminated for just cause attributable to the agent's fault.
Legislation and sources
- Turkish Commercial Code No. 6102 (in Turkish)
- Turkish Code of Obligations No. 6098 (in Turkish)
- Enforcement and Bankruptcy Law No. 2004 (in Turkish)
- Ministry of Trade – Directorate General of Domestic Trade
- Central Registry Recording System (MERSİS)
The information on this page is general and does not constitute legal advice. As legislation may change, the current rules must be assessed separately for your particular situation.